Information

Its important to bear in mind that the micro-entreprise programme only affects coperation taxes, and it doesn´t have any affect on the VAT that the business charges its customers.

In other countries like Ireland or Germany, there are regulations for small entrepreneurs that exempt them from charging VAT provided they do not exceed a certain volume of sales. In the case of Germany for example, the maximum invoice requiered in order to benefit from this programme is 17,500 euros and in Ireland its 37,5000 euros (if you offer services).

Romania also has a regulation that exempts small business owners from charging VAT on their invoices. While it´s true that the billing threshold doesn´t reach 85,000 pounds like in the United Kingdom, the countries almost €49,000 threshold is a much larger figure than what is offered in some other EU countries.
In accordance with the regulation for small entrepreneurs in Romania, up until said 49,000 euros you wont have to charge your customers VAT.

Of course, these regulations that exempt you from charging VAT also have disadvantages. If you adhere to these regulations for example, you will no longer be able to deduct VAT from your company’s purchases.

In any case, if you focus on offering your own services or digital products and you don´t need to make purchases (which is what happens when you sell products or subcontract services), this regulation will allow you to sell your products or services 19% cheaper than your competition in Romania.

If you have to make a lot of purchases and you would like to recover VAT, you can always set up a company in another country. For example, you could set up your company in the UK if you want simple administration processes, or in Bulgaria if you want to take advantage of the VAT MOOS and have a European tax identification number (in the long run, due to Brexit, surely English companies can no longer use the European tax identification number, although this remains to be seen).

Since Romania doesn´t have CFC rules, as we mentioned previously, you wont have any problems with the management of your foreign companies.

If you wish, it is also possible to obtain a community tax identification number without reaching the billing thresholdbut, in general, you would need to go in person and inquiere about it in advance with the relevant tax authorities. This is something that small business owners should keep in mind if they don´t want to travel to Romania.